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Following $650 million budget cut

July 12, 2011

Following Governor Brown's signing of a final budget that cuts state funding for the California State University by $650 million for 2011-12, the CSU Board of Trustees took action today to increase tuition by an additional 12 percent – or $294 per semester for full-time undergraduates - effective in the fall. Previously, university officials had indicated if the system was cut beyond the initial $500 million reduction adopted by the legislature in March, it would be necessary to return to the board in July for tuition action. In addition, a 10 percent or $222 per semester tuition increase for fall had already been approved by trustees last November.

"The enormous reduction to our state funding has left us with no other choice if we are to maintain quality and access to the CSU," said CSU Chancellor Charles B. Reed. "We will focus on serving our current students by offering as many classes and course sections as possible. We will also be able to open enrollment for the spring 2012 term, which is critical for our community college transfer students."

The 12 percent additional increase takes effect with the fall term and will raise tuition by $294 per semester for full-time undergraduate students, $339 for credential program participants and $360 for graduate students. For a full academic year, the added amount would be $588, bringing the annual tuition fee for full-time undergraduates to $5,472. With campus-based fees averaging $950, total fees would average $6,422.

One-third of the revenue from the tuition increase will be allocated for financial aid, and an estimated 170,000 students – almost half of all CSU undergraduates - will be fully covered for the tuition increase thanks to this provision and other grants and fee waivers. In addition, many students and families not fully covered by financial aid will benefit from federal tax credits available for family incomes of up to $180,000. Since 2007, total yearly financial aid to CSU students has increased by almost $800 million.

Measures the CSU has already taken to address the initial $500 million cut include reducing enrollment by approximately 10,000 students, and applying an estimated $146 million from tuition increases already approved for fall 2011 to help offset the budget reduction. In addition, campus budgets were reduced by a combined $281 million, and the Chancellor's office was cut by $10.8 million or 14 percent. Since the state's fiscal crisis began in 2008, CSU has reduced the number of employees by 4,125 or 8.8 percent.

The CSU faces an additional mid-year cut of $100 million if state revenue forecasts are not met, reducing CSU state funding to $2 billion. That would represent a 27 percent year-to-year reduction in state support. University officials said they would have to review options further should the CSU's budget be reduced mid-year.

The $2.1 billion in state funding allocated to the CSU in the 2011-12 budget will be the lowest level of state support the system has received since the 1998-99 fiscal year, but the university currently serves an additional 72,000 students. If the system is cut by an additional $100 million, state support would be at its lowest level since 1997-98, with the system serving an additional 90,000 students compared to that year.